Sprint suitor Son stands apart in sober Japan
TOKYO (AP) — The Japanese billionaire behind a deal that will create the world's third-biggest mobile company spent his childhood in a slum, where he proudly rode in a stinking wheelbarrow filled with pig feed, pushed by his grandmother, a Korean immigrant.
The unlikely success story of Softbank Corp. President Masayoshi Son has taken another leap with his latest mega-deal, announced Monday, to take a 70 percent stake in U.S. mobile phone carrier Sprint Nextel Corp. for $20 billion.
The biggest foreign acquisition in the history of Japan Inc. underlines Son's unusual status in a corporate culture that has long favored stability over risk-taking. Yet big deals are not the only reason Son has stood out.
He studied in the U.S., graduating from the University of California, Berkeley, and boasts American friends in high places such as Microsoft's Bill Gates. He was also close to Apple Inc.'s late founder Steve Jobs. But his high-profile acknowledgement of his Korean roots may be what most sets Son apart in Japan, which has a history of discrimination against its Asian neighbor.
Although initially met with some skepticism from credit rating agencies, Son's foray into the U.S. may serve as inspiration for similar moves by other Japanese companies as the strength of the yen makes overseas deals more affordable.
Son, Japan's second richest man with a fortune of $7.2 billion, according to Forbes, said he identified with the entrepreneurial spirit of older Japanese pioneers such as Soichiro Honda, who started the automaker that carries his name, and Sony Corp. co-founders Akio Morita and Masaru Ibuka.
Son invented a pocket translator while at Berkeley, which was later bought for $1 million by Japanese electronics maker Sharp Corp. He returned to Japan and used the money to start Softbank in 1981. In its very early days, Softbank sold computer software and then branched into publishing. Since then it has grown into an empire of Web and mobile businesses.
Son acknowledged he had grown conservative over the past two years as Softbank paid back debt from earlier acquisitions. He didn't like that change in himself. He decided he was ready to take new risks.
"Taking up a challenge always entails a big risk," Son, 55, said at a joint news conference Monday with Sprint's chief executive Dan Hesse.
Son started making headlines in the 1990s with his aggressive acquisitions of companies, which eventually included the Japan units of Yahoo and Vodafone. He became a household name by pushing broadband services more than a decade ago, when the Internet was still relatively new in Japan. He then shifted his focus to the mobile Internet.
Son has always stuck out in a nation of "salaryman presidents," where decision making is customarily done by a team and the man at the top — as it is almost always a man — rose through the ranks by not rocking the boat.
Since the nuclear disaster last year in Fukushima, northeastern Japan, Son has also been unusual in speaking out against nuclear power.
While regular people are taking to the streets in droves protesting pro-nuclear policy, the business community which includes nuclear-plant manufacturers such as Toshiba Corp. and Hitachi Inc., has largely stayed a nuclear advocate. Son is behind solar panel projects to encourage green energy as an alternative to atomic power.
Son has never made secret of his Korean ancestry, which has historically led to tragic discrimination in Japan, the colonial occupier of the Korean peninsula until 1945. Taunting in schools and difficulty in finding jobs and marriage partners are common experiences for the descendants of Korean immigrants. Two years ago, Son made his downtrodden minority roots a central theme in a company presentation that was a tearful but proud homage to his family.
Japan has its share of successes from poor or minority backgrounds. But because Japanese culture frowns upon diversity and pushes homogeneity, such people rarely talk about it as a positive part of their success.
"This is someone who is very, very precious to me," Son told a packed hall in 2010 as he outlined the company's 30-year strategy, showing on a huge screen a fading black-and-white photograph of a woman, smiling in a dress. "She is my grandmother."
She emigrated when she was 14, married his much older grandfather, and raised hogs in an impoverished part of Kyushu, the third largest of the islands that make up Japan. As a child, Son was happy to ride around on a wheelbarrow filled with scraps for the pigs.
His family's circumstances improved over the years, shifting from raising hogs to running a restaurant, but Son began to feel ashamed of his Korean background as he grew older and even rejected his grandmother. He took on a Japanese name.
It was not until his decision to attend high school in the U.S. at age 16 that he vowed to become an entrepreneur, seeing it as a way to create a more inclusive world, he said at the end of his two-hour presentation, fighting tears.
Against that backdrop, Son triumphantly declared Monday that with the Sprint deal his company had truly beaten Nippon Telegraph and Telephone Corp., a former government monopoly and an iconic symbol of old Japan, and was on its way, he hoped, to No. 1 mobile company in the world. The combination of Softbank and Sprint will be the world's No. 3 mobile company by revenue.
In Japan, Softbank was always an also-ran third to NTT DoCoMo, NTT's mobile unit, and KDDI Corp. That began to change after Softbank worked out a deal with Apple, thanks to Son's American connections, to be the first to offer the iPhone in Japan where the market was dominated by cellphones compatible only with the country's special network-linking formats.
Softbank users in Japan have grown to more than 30 million from 19 million in 2008, the year it began offering the iPhone. KDDI began offering the iPhone only last year. NTT DoCoMo recently acknowledged it won't offer the iPhone.
Analysts anticipate an even bigger exodus to Softbank with the ongoing rollout of the iPhone 5, potentially catapulting Softbank to No. 1 in Japanese market share in coming months.
"Some people have been waiting four years for DoCoMo to come out with an iPhone. They're fed up with waiting," said Hisashi Kamio, a consultant, who has written books on computer technology. "The iPhone 5 is dealing a serious blow to DoCoMo's brand power."
Daiwa Securities Co. analyst Koki Shiraishi said Son was making a smart move with its Sprint acquisition, noting the risks were minor compared with the 2006 takeover of Vodafone Japan, which Son transformed into a profitable company Softbank Mobile.
"The prospects for the latest deal are several notches better, considering the cash cow in its mobile business," he said.
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